R&D, innovation and knowledge spillovers: An empirical reappraisal based on cross sectional dependence

Bottazzi and Peri (2007) show that the existence of a cointegrating relationship between the domestic stock of knowledge, domestic R&D and the international knowledge stock can be interpreted as evidence supporting the semi-endogenous growth models versus the endogenous growth ones. We replicate their study in a wide sense by analysing a slighlty wider sample of countries observed over a more recent time period and by estimating the cointegrating vector with an econometric methodology that is robust to cross sectional dependence. Our replication confirms Bottazzi and Peri’s main results but finds stronger spillover effects.